CASE 2 Oracle's acquisition of NetSuite


CASE 2 Oracle's acquisition of NetSuite 


was a significant deal that took place in 2016. Here are some details about the acquisition:


Acquisition Overview

1. Announcement and Purchase

   Oracle announced the acquisition of NetSuite on July 28, 2016, for approximately $9.3 billion in an all-cash deal. The acquisition was completed on November 7, 2016.

Strategic Rationale

1. Cloud Expansion

   Oracle's acquisition of NetSuite was a strategic move to strengthen its position in cloud computing, particularly in the area of cloud-based Enterprise Resource Planning (ERP) solutions.

2. Complementary Offerings

NetSuite, known for its cloud-based ERP solutions, complemented Oracle's existing enterprise software and cloud services. The acquisition aimed to provide a more comprehensive suite of cloud applications to a diverse customer base.

Operational Integration

1. Leadership Changes

   After the acquisition, Jim McGeever, former NetSuite COO, became the Executive Vice President of the NetSuite Global Business Unit within Oracle. Oracle initially allowed NetSuite to operate independently under its existing management team.

2. Product Integration

    Oracle's acquisition aimed at integrating NetSuite's cloud-based ERP solutions with Oracle's existing cloud services and enterprise software offerings. This integration allowed Oracle to provide a more comprehensive suite of cloud-based applications to its customers.

3. Leadership Changes

    Following the acquisition, Zach Nelson, who had been the CEO of NetSuite, stepped down from his position. Oracle appointed Jim McGeever, formerly NetSuite's COO, as the Executive Vice President of the NetSuite Global Business Unit within Oracle

Market Impact

1. Target Customer Base

   NetSuite's focus on small and medium-sized businesses (SMBs) provided Oracle with an opportunity to expand its customer base in this segment.

2. Competitive Landscape

    The acquisition was seen as a strategic move by Oracle to better compete with other major cloud service providers, including Amazon Web Services (AWS), Microsoft Azure, and others. It allowed Oracle to enhance its competitiveness in the cloud market, particularly in the area of cloud-based business applications.

Financial and Regulatory Aspects

1. Purchase Price

   The acquisition was valued at $9.3 billion, and it underwent regulatory approval, receiving the majority vote from NetSuite's unaffiliated shareholders.

Post-Acquisition Updates

Oracle continued to invest in NetSuite's capabilities post-acquisition, introducing updates and innovations to maintain competitiveness in the cloud-based ERP and business management solutions market.

Strategic Focus on Cloud Growth

The acquisition aligned with Oracle's broader strategy to transition its business model toward cloud-based services, adapting to the changing landscape of enterprise software.

Customer Transition and Assurance

Oracle assured NetSuite's existing customers of uninterrupted service and support, facilitating a smooth transition and integration process.



In summary, Oracle's acquisition of NetSuite was a strategic move to expand its cloud portfolio, enhance competitiveness, and provide a more comprehensive suite of cloud applications to businesses of varying sizes. The integration efforts focused on combining the strengths of both companies to create synergies in the cloud-based ERP and business management solutions market.

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